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Help Me Understand Financial Aid

Sep 26, 2018

Saving may be the best way to pay for college, but sometimes it’s just not enough. There are many strategies to fill the gap between how much you have and how much you need.  Parents can make a huge impact on the process by staying organized and knowing the lingo to help support their child’s college bill payment strategy.

What is FSA?

FSA is Federal Student Aid, an office of the U.S. Department of Education. A registered FSA ID provides access to your information and allows you to e-sign federal financial aid documents.


You can establish your secured FSA ID through the FAFSA website. You must change your FSA ID password every 18 months if you haven’t done so earlier. Consider changing it at the start of each new academic year to avoid reminder prompts.

What is FAFSA?

FAFSA is your Free Application for Federal Student Aid. It’s the form you probably submitted through the Department of Education’s Federal Student Aid FAFSA website when first applying for financial aid for college (and should refile every year and anytime special circumstances arise that change your financial situation). About 22 million FAFSA submissions are processed annually, so you are not alone.


Each state sets its own deadline for you to complete your FAFSA, and it often is earlier than the federal deadline. Check the FAFSA website to discover the deadline for your state.

What is a CSS/Financial Aid PROFILE?

The College Scholarship Service Financial Aid PROFILE or CSS/Financial Aid PROFILE is an application for nonfederal financial aid that is distributed by the College Board (you may know this organization for its PSAT, SAT, and CLEP tests), which is then sent to colleges and universities of your choice for a pre-school fee. It generally asks for more information about your family’s financial status than FAFSA. It is required by about 250 colleges, universities, professional schools, and scholarship programs.


If you’ve taken the PSAT or SAT tests, you probably have registered with a College Board account already, which will streamline the CSS/Financial Aid PROFILE process.

What are the deadlines to apply for financial aid?

  • There are potentially three different deadlines: The federal deadline (which is usually June 30 for initial filing with a short period for filing corrections following that date), your state’s deadline (which varies by state), and possibly your school’s deadline (some schools set their own, earlier deadline)
  • Check the Student Aid deadlines for your specific state here


Be sure to check with your school to see if it has its own financial aid application deadline, which may be earlier than the state deadline.

How do I know what financial aid I’m getting?

In addition to a college acceptance letter, you’ll receive a financial aid award letter. There is no single format for award letters, which can make understanding the differences between offers from different schools difficult. Generally the letter will outline how much attending the school will cost, the various types of financial aid (federal, state, and directly from the school) you’ll receive (often including money that will need to be paid back with interest), and how much your family will be expected to contribute to paying for school.

  • What’s included in the definition of “cost of attending” may vary widely between schools
    • Some schools don’t even include “cost of attending” in the award letter
    • Some schools will give one total cost, while others itemize expected expenses
    • Some schools won’t include living costs, such as room and board
    • Books, supplies, fees, personal expenses, transportation costs, and a variety of other expenses may or may not be included


Create a small chart showing all the costs for each school you’re considering so you can account for any costs that might not be mentioned in the award letter.

  • Be sure you understand what financial aid the school is really offering
    • It may take some effort to decipher the names and acronyms for different programs, but it is important that you do, so you know what’s really offered
      • Grants and scholarships (including outside scholarships, which you must report to the school) that don’t require repayment
      • Federal student loans that will be paid back with interest
      • Loans from the college (which may be private loans in disguise)
      • Work-study that requires you to work for the money
    • Some schools’ award letters will include non-need-based loans (such as the Stafford loan, the PLUS loan, and private student loans) that are available to everybody, without regard to financial need
      • These loans are available at every school, even if not listed in the letter
      • Maybe included in the letter to be sure that families know about them
    • Some schools give larger grants and smaller loan amounts to freshman, then decrease the grant awards and increase loans amounts in later college years
      • The upper limit on student loans increases in later college years
      • Be sure to check with the school’s Financial Aid Office to determine whether or not you can expect the same grant money in later years if your financial situation remains the same


Create a small chart showing all the financial aid awarded by each school you’re considering, including whether will need to be repaid, to account for differences between awards, such as more grants and scholarships vs. more loans and family contributions.

  • What your family is expected to contribute to paying for college ideally would come from savings, but may require taking out private student loans
  • Award letters may not highlight the difference between your financial aid award and the costs that will need to be covered from other sources (usually private student loans)
    • Sometimes award letters include private loans as part of the award because private loans often are used to cover the difference between costs and the aid awarded, you may have difficulty getting enough money to cover the gap
  • Your financial aid award covers just one academic year, and you must reapply for financial aid each year while in school.



Some award letters will list specific lenders, but you are not required to use a particular lending institution, just because it is recommended by the school. You can compare rates and terms from various lenders, and choose the one offering you the best terms.

  • The Department of Education introduced its Federal Aid Shopping Sheet beginning in the academic year 2013-14, which asks colleges to clearly show:
    • Shows the cost of attending the college
    • Indicates the number of grants and scholarships awarded to the student
    • States the net price that the family will pay, and delineates the family’s options for paying those net costs, such as work options, federal loans, and other options, including non-federal loans


Thousands of colleges agreed to use the Federal-Aid Shopping Sheet, but thousands do not. Some likely add confusion by providing students with both the institution’s Financial Aid Award Letter and the Federal Aid Shopping Sheet.

What should I do if I was denied financial aid (or wasn’t offered enough)?

Few things can be as disheartening as expecting financial aid, then getting drastically less than expected or getting denied. Here are seven steps to appeal a financial aid decision.

  • Ask for more aid, and be polite and courteous — don’t be confrontational.
    • Frame communications as a request for reconsideration
    • Don’t use the word “negotiate”
  • Know the process the school uses to reconsider aid
    • Odds for a successful appeal are higher at colleges with larger endowments, such as private colleges and flagship public universities
  • Review your FAFSA and CSS/Financial Aid PROFILE form submissions
    • Check for mistakes that may have been made in the rush to file
    • Perhaps you overstated assets or lost significant assets since filing
  • Ask a financial aid administrator if your tax deductions were counted as income
    • Some schools do not accept all tax deductions and view some as untaxed income
    • If you know which deductions the school converted to income, it may be possible that your true financial need is greater than they think
  • Write a letter documenting “special circumstances” and any changes in your family’s situation since your FAFSA and CSS/Financial Aid PROFILE form submissions, such as:
    • Divorce
    • Death of a wage earner
    • Unexpected, unreimbursed medical bills or costs associated with caring for children with special needs
    • Tuitions for private elementary or secondary schools
    • One-time retirement in the Base Year
    • Necessary major home repairs, such as roof, heating or windows
  • Schedule a follow-up meeting or phone call to make your appeal directly to the financial aid administrator
  • As a potential freshman, if you’re offered a more generous financial aid package from a different school, politely show the school that offered you a smaller financial aid package that another peer school came to a different conclusion
    • It may be possible to get the schools to compete for your attendance


Always be polite and courteous. Financial aid administrators want to be helpful, but there is only so much they can do, so be reasonable in your approach.

What can change your financial aid situation?

  • Family circumstances, such as job loss, divorce, or death
  • A sibling enrolling in college while you’re in school may increase your financial aid
  • A sibling graduating from college while you’re in school may decrease your financial aid

TIP: There is no way of knowing what you’ll receive until you apply for it.

What current college students need to know about financial aid….

It’s very important that continuing college students continue to apply for financial aid every year, even if it is denied at first. Also, be sure to keep your forms updated as life circumstances change. Click here for more information.


Be your own best advocate. Many people want to see your success, including those in the Financial Aid Office. Help them to help you by asking for guidance with things you don’t fully understand, by being accurate when filling out forms, by meeting deadlines, and by being polite and courteous at all times — especially if you receive bad news.